John Ian Barzo

A spouse without legal title sought an interlocutory injunction restraining mortgagees from exercising power of sale over Muskoka properties alleged to constitute a matrimonial home.

The mortgagees relied on a statutory declaration by the titled spouse asserting that another property had been designated as the matrimonial home under s. 21(3)(d) of the Family Law Act.

The court found strong evidence capable of belief that the lender had actual or constructive notice that the property was used as a family cottage and therefore a matrimonial home.

The presumption in s. 21(3)(d) could not protect a lender who knew facts inconsistent with the declaration.

Applying the three-part injunctive test, the court found a serious issue to be tried, irreparable harm to the spouse, and a balance of convenience favouring preservation of the property pending trial.

Following a successful trial in which the plaintiff established that a property transfer between a debtor and her parents constituted a fraudulent conveyance designed to defeat a creditor, the plaintiff sought costs on a substantial indemnity basis.

The court held that the defendant’s litigation conduct, including implausible testimony denying the fraudulent nature of the conveyance, justified elevated costs.

The court also considered whether costs could be awarded against non-parties who had funded and effectively controlled the litigation.

Applying principles governing non‑party costs liability, the court found that the parents were the real parties behind the defence and that it was just to hold them responsible.

Costs of $60,000 inclusive of disbursements and HST were awarded against the defendant and the non‑party parents.